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Liechtenstein’s Banking Sector: A Web of Rules and Regulations

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In Liechtenstein, there is no specific law governing the relationship between banks and their customers or third parties. Instead, a complex web of general rules and provisions on contracts and legal transactions applies to these relationships.

Contractual Obligations

One of the most commonly used types of contracts in the banking sector is the contract of mandate, which outlines the duties and responsibilities of both the bank (agent) and its customers (principals). According to the Liechtenstein Civil Code, banks are obliged to procure transactions diligently and honestly, and to transfer all benefits arising from these transactions to their principals. Banks are also entitled to use any means necessary to achieve this goal, as long as they comply with the limitations of the power of attorney.

General Terms and Conditions

Liechtenstein banks typically have their own General Terms and Conditions that govern their relationships with customers. However, these terms must meet certain criteria in order to be valid and applicable. For example:

  • Any unusual provisions that are detrimental to the customer must be explicitly pointed out to the customer.
  • Contractual provisions that cause a substantial imbalance of rights and obligations must be considered void.

Consumer Protection Act

The Consumer Protection Act (KSchG) also plays an important role in regulating banking relationships in Liechtenstein. This act contains more favorable provisions for customers and supersedes provisions of the Civil Code that were otherwise applicable between individuals.

Cross-Border Banking Activities

Liechtenstein banks must obtain a licence from the Financial Market Authority (FMA) in order to operate in the country. However, under the freedom to provide services, banks with their seat in an EEA country may also operate in Liechtenstein provided that their home Member State has notified the FMA prior to their first-time activity in Liechtenstein.

Conciliation Board

In 2009, the Liechtenstein legislator introduced an extrajudicial conciliation board to resolve disputes between customers and banks. This board acts as a mediator to encourage discussions between the disputing parties and lead them to a mutually acceptable solution. However:

  • Neither the bank nor the customer is bound to accept any generated solution.
  • They are free to take further legal measures if necessary.

Contact

For more information on Liechtenstein’s banking regulations, please contact: